Surprise, Surprise, The Senate Pass Their Version of the Economic Stimulus Package!!!

Surprise, Surprise.   The Senate approved a nearly identical stimulus package as the one passed by the House last week with an 81-16 vote. The $150 billion economic stimulus package is designed to provide a timely, but targeted boost to our floundering economy by improving liquidity and providing support for our housing market, one of the main casualties of the current credit crunch. A compromise version is expected quickly and the bill is likely to be sent to President Bush for his signature by this weekend. The plan gives a $1,200 tax rebate for households ($600/individual), with $300 more for each child. The full rebates would be sent to families with incomes under $150,000, including seniors and the disabled. The plan would also cut business investment taxes by $44 billion.

More important to us lenders and real estate professionals in general, especially in high cost areas like the California's San Francisco Bay Area, is the stimulus package contains provisions for a one-year (till 12/31/2008) increase to the current conforming and FHA limits.  Conforming and FHA limits will increase to $625,000 nationwide and up to $729,000 in high-cost areas.  By increasing these loan limits, congress hopes to improve liquidity in the mortgage market and raise homebuyer confidence, which, in turn, will increase home sales, home refinancing, and economic activity in general.  This change has the potential to save some homeowners between $3,000 to $5,000 a year who either purchase or refinance a home with mortgage above $417,000 but below $729,000 instead of a Jumbo loan after the bill is signed.

CONGRESS STILL HAS TO WORK OUT A COMPROMISED BILL AND THE PRESIDENT MUST SIGN IT. 

Alan ‘AJ' Nisen, a Contra Costa California Mortgage Loan professional on ActiveRain.com